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Channel 4 seeks public funds for interactive content

Channel 4 has asked the government for money for the first time in its 22-year history to help pay for public service content as it faces up to an estimated £100m funding gap.

The broadcaster says it needs extra funding to help pay for the sort of health and education initiatives that go to the heart of its public service remit.

Although the broadcaster has indicated in the past that it will need public funding to survive in its current form after the analogue signal is switched off, it is the first time it has proposed spending the money on on-screen content.

In its written submission to the second phase of Ofcom's public service broadcasting review, Channel 4 called for "[public funding] support for developing content and services across new media platforms".

But the move could eventually pave the way for the funding of some of its flagship public service programming such as Channel 4 News.

The broadcaster's formal submission to Ofcom this week follows weeks of lobbying by senior Channel 4 executives in the media and on conference podiums to make the radical case for public funding.

For the moment, the broadcaster envisages spending the money on the fringes of its schedule online and on interactive TV.

The idea for the public funding model was first floated by the Channel 4 deputy chairman, Barry Cox, earlier this month, as revealed by MediaGuardian.

The channel had been considering a merger with Five to help it survive after analogue switch-off. But talks were called off earlier this month.

This week the Channel 4 chief executive, Andy Duncan, said alternative measures to help subsidise the channel, such as additional digital spectrum and joint ventures with the BBC, would be insufficient by themselves to fill its budget black hole.

"To ensure Channel 4's long term future, some form of direct or indirect public funding support will be required," he said.

Mr Duncan said a "limited but appropriate amount of external support" was required for the channel to "build towards a fully digital Britain with confidence rather than face a long period of further uncertainty".

The public money need not necessarily come from the licence fee - it could also come from general tax revenue or a tax on other broadcasters.

The station forecasts "a significant potential funding gap" within four to five years, growing to £100m by digital switchover.

Channel 4 has also made an early play to run the Public Service Publisher, the public service channel outlined by Ofcom earlier this year as one way of keeping the BBC in check. In its submission to Ofcom, station bosses said Channel 4 was the "natural broadcast partner" for the PSP, which will receive around £300m of public funding a year.

Channel 4 said the PSP, which is not expected to launch until close to 2012 and will be licensed to a broadcaster or other media organisation for a 10-year period, was an "imaginative and interesting idea".

However, it "stressed its belief that the first priority for the regulator should be future proofing Channel 4. Assuming this is done, Channel 4 believes it would be the natural broadcast partner for the PSP."

Mr Duncan said Channel 4 would provide "vital competition to the BBC as ITV and Five's PSB contribution inevitably declines. To a large extent this vision would be delivered through generating our own commercial income and self-reliance.

"But we believe we will also need a limited but appropriate amount of external support and we want to work with Ofcom to put measures in place now that will allow us to build towards a fully digital Britain with confidence rather than ace a long period of further uncertainty."

"All the other terrestrial broadcasters either benefit from or are effectively fully cushioned against the impact of digital switchover," said Mr Duncan. "We are working very hard to make sure that the same is true of Channel 4, allowing us to continue being Britain's bravest and most innovative broadcaster, making a significant contribution to the creative and cultural life of this country."

As revealed by the Guardian, station chiefs have already looked at the possibility of the BBC subsiding Channel 4's digital transmission costs. The non-programming support will save the channel up to £30m a year.